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This wouldn't work for companies that have significant costs other than employees. So for tech companies it's generally accurate, but its unlikely to work for o

• reduxredacted 16y ago
  No doubt! Though I disagree that it would work for tech companies, since that encompasses such a broad range of companies. A tech company that serves mostly enterprises may employ far fewer, yet more highly paid employees for customer service, yet a tech company that sells directly to consumers (especially if it's sales that requires a large customer service department) may employ many, lower paid employees. The other problem I have with all of this is "why revenues"? I mean, that's a valuable thing to know, but without margin or profit, it's an easy figure to game. Ask kozmo.com or MCI|WorldCom or any of the "Generate lots of revenue then IPO" companies of the late 90's early 00's. Investors lost their minds and forgot that if you sell a loaf of bread for US$1.00 and you pay $1.50 for it, you've lost $0.50. You'd be better off not buying the loaf of bread (or, perhaps, getting out of the bread loaf selling business). It tells you nothing you can really trust. (Edit: to fix basic math error)